CBK Set to Roll Out New Currency in Kenya

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The Central Bank of Kenya (CBK) is set to introduce a new form of legal tender, in form of a digital currency in Kenya.

In a document dated Thursday, February 10, CBK has detailed how the new Central Bank Digital Currency (CBDC) will be used once it is instituted.

According to CBK, digital currency transactions will be purely automated, and their exchange rate will be similar to that of the coinages and notes that are currently in circulation.

“Rapid technological innovations and developments are accelerating the pace of digitisation. New digital payment methods have emerged to facilitate transactions, including CBDC, issues by the central banks to serve as money in a digital form,” part of their statement read.

“CBK has been closely monitoring these developments globally. Accordingly, CBK has prepared the Discussion paper that outlines the evolution of payments globally and in Kenya and discusses recent digital payment methods including electronic money, CBDC, stable coins, and other cryptocurrencies.”

To ensure smooth transitioning in line with the Constitution, CBK invites citizens for public participation. It says that CBDC is a new trend in the banking sector, and many countries have adopted it.

“The transition to digital payments has been accelerated by the proliferation and easy access to mobile devices, as well as the emergence of Fintech firms that constantly innovate new products to run on these devices,” CBK stated in its document.

CBK pointed out that digital currencies have cheaper transaction costs and fast convertibility as compared to other forms of payments such as paper money.

“Therefore, the consideration to introducing a CBDC in the payments system in Kenya could target cost reduction, interoperability and enhancing cross border payments. Existing proposals indicate that CBDC might hold the potential to achieve much-needed interoperability.”

CBDC transactions will only be applicable between countries that have adopted similar forms of digital currencies. CBK will also include CBDC in universal payment modes.

The post CBK Set to Roll Out New Currency in Kenya appeared first on LitKenya.

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